Tesla (TSLA.US) Q4 deliveries were lower than expected after last week's update, and full-year sales declined for the second year in a row, and the energy business became one of the few highlights

The Zhitong Finance App learned that Tesla (TSLA.US) released automobile production and delivery data for the fourth quarter of 2025 on Friday. After the financial report was released, the company's stock price once rose by more than 1%. According to the data, Tesla delivered a total of 418,227 cars in the fourth quarter, with an output of 434,358 vehicles; the annual delivery volume was 1.64 million vehicles, and the annual output was about 1.65 million vehicles. In contrast, Wall Street's previous forecast for delivery for the fourth quarter was about 426,000 vehicles, while Tesla said in the company's consolidated consensus forecast released on December 29 last year that the analysts interviewed expected delivery volume to drop 15% year-on-year to 422,850 vehicles.

On a year-on-year basis, Tesla's delivery volume in the fourth quarter of 2025 decreased by about 16% compared to 495,570 vehicles in the same period in 2024, and production for the quarter also decreased by 5.5% compared to 459,445 vehicles in the same period last year. Delivery volume is the closest measure to Tesla's “sales volume,” but the company did not accurately define it in shareholder documents. At the full year level, Tesla's delivery volume in 2025 fell from 1.79 million units in 2024 to 1.64 million units, a year-on-year decrease of 8.6%. This is the second year in a row that there has been an annual decline.

While the main electric vehicle industry is under pressure, Tesla's energy business continues to grow. The company said it deployed a total of 14.2 gigawatt-hours of battery energy storage products in the fourth quarter, up from a record 12.5 gigawatt-hours in the previous quarter. These energy storage systems include batteries for home backup power and large-scale energy storage solutions for data centers and utilities. Tesla plans to announce full financial results for the fourth quarter on January 28.

Changes in the competitive environment in the market are also an important background to the decline in delivery. Tesla is facing fierce competition from China's BYD, South Korea's Kia and Hyundai, and European Volkswagen. At the same time, US President Trump decided to end the federal electric vehicle purchase incentive policy early on September 30, which also had an impact on Tesla's sales. The early expiration of the policy prompted some consumers to move their demand for car purchases forward to the third quarter. This affected not only Tesla, but also other car companies.

In fact, Tesla faced multiple challenges in early 2025. After strongly supporting Trump's return to the White House, CEO Musk led the US Government Efficiency Department in the first quarter to push for a reduction in the number of federal employees. Furthermore, Musk publicly supports Germany's far-right anti-immigrant political party, AfD, and recently called for the abolition of the European Union. These remarks have sparked continued consumer revulsion in Europe and the US. Even though Tesla launched a cheaper Model Y SUV version in October, sales performance has not fully recovered.

Despite pressure on fundamentals, Tesla's stock price rebounded sharply in the second half of 2025, with a cumulative increase of about 40% in the third quarter and a record high in mid-December. Musk increased his personal stock holdings by about 1 billion US dollars in September. In November, shareholders also approved a new $1 trillion compensation plan, giving Musk more shares and greater control. The plan had previously sparked controversy. Critics pointed out that it did not require Musk to invest minimum working hours, nor did it restrict his political activities.

Judging from regional data, Tesla's market share in Europe has declined markedly. Since the company did not disclose delivery by region, data from the industry organization European Automobile Manufacturers' Association became an important reference. According to the data, Tesla's new car registrations in Europe fell 39% year on year in the first 11 months of 2025, while BYD's registrations in Europe surged 240% during the same period. Overall, the European market's acceptance of pure electric vehicles continued to increase in 2025, with pure electric vehicles accounting for about 16% of new vehicle sales in that year.

Some analysts believe that Tesla's more user-friendly Model Y standard version launched in October is expected to help the company stabilize or even recover some of its market share in the next few quarters. Analysts at Canaccord Genuity pointed out in last week's report that the popularity of electric vehicles in emerging markets such as Thailand, Vietnam, and Brazil is accelerating, and strong consumer interest may bring long-term upward space for Tesla, even though it still needs to face fierce competition from Chinese car companies on a global scale. In addition to BYD, Chinese electric vehicle manufacturers such as Xiaomi and Geely are becoming Tesla's new direct rivals.

However, Tesla's core story to investors is no longer limited to electric vehicle sales, but what Musk called “sustainable affluence.” This vision includes autonomous taxis, which he has repeatedly promised over the years, as well as humanoid robot projects. Musk said that these robots may work in factories in the future, and even take on roles such as babysitters, security maintenance, and even surgery, becoming an important support for Tesla's long-term valuation.